Traditional shopping habits have been turned upside down this year as the coronavirus outbreak and lockdown restrictions necessitated changes to day-to-day routines.
- Pound plummets vs. US dollar and euro
- Euro supported by ECB comments
- US dollar surging as coronavirus crisis continues
Pound hits fresh lows
The pound entered freefall yesterday, with the GBP/USD exchange rate striking its lowest levels since 1985.
Sterling sentiment has been completely overwhelmed by coronavirus developments in recent days, with concerns over the UK government’s response to the outbreak undermining confidence in the pound.
Adding to the pressure on GBP exchange rates were comments from new Bank of England (BoE) Governor Andrew Bailey, who warned the UK is facing an economic emergency.
Even if the government and Bank of England (BoE) signal further support for the economy this may not be enough to convince investors.
ECB announces €750bn quantitative easing programme
The euro fluctuated yesterday as the EU took the unprecedented step to close its borders to foreign travellers.
However, the currency was later supported as the European Central Bank (ECB) announced a new €750bn quantitative easing programme.
Today investors will be looking for any signs that the EU’s quarantine efforts are beginning to show results.
Flight to safe-havens lifts US dollar
The US dollar roared higher yesterday as panicky investors flocked to the safety of the ‘greenback’.
Adding to the appeal of the US dollar was its status as the world’s reserve currency, resulting in massive demand for USD as individuals and business seek more liquidity during the crisis.
The US dollar is likely to remain trading higher today as the coronavirus crisis continues.
Thursday, 19th March 2020
09:00 EUR German IFO Business Sentiment Index
12:30 USD Philadelphia Fed Manufacturing Index
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)